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Europe close: Stocks gain ground as Draghi keeps steady hand on tiller
European stocks climbed higher as Mario Draghi sent the euro lower on Thursday afternoon, having been encouraged to a positive start by a positive Wall Street.
At the close, the benchmark Stoxx 600 was up 0.94% points to finish at 383.75, alongside a gain of 0.63% to 12,500.47 for the German Dax, a jump of 0.7% to 5453.58 for the CAC 40 in Paris and 1% to 24,039.63 for Milan's benchmark.
The euro slumped 0.38% against the dollar to 1.2115 after European Central Bank President Mario Draghi played his cards beautifully, while the yield on the benchmark 10-year German bund was trading lower at 0.59%, as had the yield on similarly-dated US Treasuries, which had retreated to 2.8% earlier.
In economic news, rate-setters in Frankfurt opted to keep a steady hand on the tiller, by not reading too much into the recent softness in some economic indicators while expressing continuing confidence in the outlook, both for activity and on the outlook for inflation.
During his post-meeting press conference, however, Draghi conceded that the governing council was "concerned by recent developments" and that the extent of the recent slowdown in various surveys of activity had been "unexpected".
Marchel Alexandrovich, senior European economist at Jefferies, said, "After amending the language around its forward guidance last month, the ECB was fully expected to deliver little of substance at today's meeting, and Draghi stuck to this script. Using the standard stock phrase around the need for 'prudence, patience and persistence' Draghi acknowledged the increased uncertainties around the incoming data; but, importantly, suggested that some of [the] weakness was likely to be temporary in nature."
He felt the ECB is likely to hold off until the meeting in late July to publish the full details of the taper, with the council making a choice between a three or a six-month-long period over which to conclude the asset purchase programme.
Elsewhere, GfK's consumer sentiment gauge for Germany slipped from a reading of 10.9 for April to 10.8 in March.
Over in Spain, unemployment got off to an unexpectedly weak start to the year, dropping by 124,000 to 18.874m over the three months to March, according to figures from INE, pushing the country's rate of unemployment higher to 16.74% (consensus: 16.45%).
On the corporate front, Deutsche Bank posted first-quarter net income of 120m, down from 575m in the year-ago period and well below the 379m that analysts were expecting. Nevertheless, following an initial dip, the stock price later recovered.
Significantly, the lender also announced that it was stepping back from its global ambitions, with new chief executive Christian Sewing announcing a series of "painful but regrettably unavoidable" job cuts as the German bank looked to scale back its corporate and investment banking operations.
In France, engine-maker Safran posted higher sales for its first quarter and confirmed its outlook for 2018, sending its shares duly higher.